This document provides an overview and learning objectives for a chapter on accounting for merchandising operations. It discusses key differences between service and merchandising companies, including that merchandising companies buy and sell goods while service companies do not include cost of goods sold in their financial statements. It also covers recording purchases and sales under a perpetual inventory system, including entries for purchases, freight costs, returns, discounts, and sales.
This document discusses accounting for merchandising operations under a perpetual inventory system. It covers recording purchases and sales, including returns and discounts. It explains adjusting entries needed to update inventory balances and the multiple-step income statement format that distinguishes gross profit and operating expenses. The accounting cycle for a merchandising company is similar to a service company except for an additional inventory adjustment entry.
This document discusses accounting concepts related to merchandising operations and the multiple-step income statement. It defines key terms like cost of goods sold, gross profit, and profit margin ratio. It explains the differences between perpetual and periodic inventory systems, and how to record purchases, sales, returns, and discounts under each. The document also distinguishes between single-step and multiple-step income statements and discusses factors that affect profitability.
This document discusses accounting for merchandising operations under a perpetual inventory system. It provides examples of recording purchases, sales, returns and allowances, discounts, and the flow of costs. Purchases are recorded by debiting merchandise inventory and crediting accounts payable. Sales are recorded by debiting cost of goods sold and crediting merchandise inventory, and by crediting sales revenue and debiting accounts receivable. Returns are handled through contra accounts like sales returns and allowances that are debited. Discounts are also treated as contra revenue accounts. The document explains the key steps in the accounting cycle for a merchandising business.
1) The document discusses accounting for merchandising operations under a perpetual inventory system. It describes how purchases, sales, returns and allowances are recorded.
2) Purchases are recorded by debiting inventory and crediting accounts payable. Sales are recorded by crediting sales revenue and debiting cost of goods sold and inventory.
3) Returns and allowances are contra accounts that are credited to offset original debit entries for purchases or sales. This summary highlights the key accounting entries for a merchandising business.
1. The document describes accounting concepts and procedures for merchandising companies, including recording purchases and sales under a perpetual inventory system.
2. Key concepts covered include recording purchases on account, purchase returns and allowances, purchase discounts, recording sales on account, sales returns and allowances, and sales discounts.
3. Examples are provided to illustrate journal entries for typical purchase and sales transactions such as recording purchases and payment with a discount taken, and recording sales and subsequent returns.
This document provides an overview of accounting for merchandising operations. It defines merchandising companies as those that buy and sell goods, with sales revenue as the primary source of income. It discusses the differences between merchandising and service companies, including that merchandising companies use an inventory account and calculate cost of goods sold. The document also covers perpetual and periodic inventory systems, recording purchases and sales, and purchase/sales returns, discounts, and allowances.
The multiple-step income statement for a merchandiser shows each of the following features except:
b. cost of goods sold.
The multiple-step income statement shows:
- Net sales
- Gross profit
- Operating expenses
- Nonoperating activities
- Net income
It does not specifically show cost of goods sold, as that amount is used to calculate gross profit.
1. The passage describes fraud committed by a store cashier named Holly Harmon over a short period of time using three methods: switching UPC labels to charge more for items, voiding sales but leaving items in carts, and scanning empty containers but not items inside.
2. Holly was later identified through a review of past surveillance tapes after she did not show up for a shift. This allowed the store to observe her thefts on video.
3. The passage notes that better human resource and physical controls could have prevented the fraud, such as background checks, software to flag voided transactions, and random checks of video and register records.
This document discusses accounting for merchandising operations under a perpetual inventory system. It covers recording purchases and sales, including returns and discounts. It explains adjusting entries needed to update inventory balances and the multiple-step income statement format that distinguishes gross profit and operating expenses. The accounting cycle for a merchandising company is similar to a service company except for an additional inventory adjustment entry.
This document discusses accounting concepts related to merchandising operations and the multiple-step income statement. It defines key terms like cost of goods sold, gross profit, and profit margin ratio. It explains the differences between perpetual and periodic inventory systems, and how to record purchases, sales, returns, and discounts under each. The document also distinguishes between single-step and multiple-step income statements and discusses factors that affect profitability.
This document discusses accounting for merchandising operations under a perpetual inventory system. It provides examples of recording purchases, sales, returns and allowances, discounts, and the flow of costs. Purchases are recorded by debiting merchandise inventory and crediting accounts payable. Sales are recorded by debiting cost of goods sold and crediting merchandise inventory, and by crediting sales revenue and debiting accounts receivable. Returns are handled through contra accounts like sales returns and allowances that are debited. Discounts are also treated as contra revenue accounts. The document explains the key steps in the accounting cycle for a merchandising business.
1) The document discusses accounting for merchandising operations under a perpetual inventory system. It describes how purchases, sales, returns and allowances are recorded.
2) Purchases are recorded by debiting inventory and crediting accounts payable. Sales are recorded by crediting sales revenue and debiting cost of goods sold and inventory.
3) Returns and allowances are contra accounts that are credited to offset original debit entries for purchases or sales. This summary highlights the key accounting entries for a merchandising business.
1. The document describes accounting concepts and procedures for merchandising companies, including recording purchases and sales under a perpetual inventory system.
2. Key concepts covered include recording purchases on account, purchase returns and allowances, purchase discounts, recording sales on account, sales returns and allowances, and sales discounts.
3. Examples are provided to illustrate journal entries for typical purchase and sales transactions such as recording purchases and payment with a discount taken, and recording sales and subsequent returns.
This document provides an overview of accounting for merchandising operations. It defines merchandising companies as those that buy and sell goods, with sales revenue as the primary source of income. It discusses the differences between merchandising and service companies, including that merchandising companies use an inventory account and calculate cost of goods sold. The document also covers perpetual and periodic inventory systems, recording purchases and sales, and purchase/sales returns, discounts, and allowances.
The multiple-step income statement for a merchandiser shows each of the following features except:
b. cost of goods sold.
The multiple-step income statement shows:
- Net sales
- Gross profit
- Operating expenses
- Nonoperating activities
- Net income
It does not specifically show cost of goods sold, as that amount is used to calculate gross profit.
1. The passage describes fraud committed by a store cashier named Holly Harmon over a short period of time using three methods: switching UPC labels to charge more for items, voiding sales but leaving items in carts, and scanning empty containers but not items inside.
2. Holly was later identified through a review of past surveillance tapes after she did not show up for a shift. This allowed the store to observe her thefts on video.
3. The passage notes that better human resource and physical controls could have prevented the fraud, such as background checks, software to flag voided transactions, and random checks of video and register records.
1) The document provides an overview of accounting for inventory under a periodic inventory system according to IFRS and compares it to U.S. GAAP.
2) Key differences between IFRS and GAAP include IFRS allowing classification of expenses by nature or function, permitting revaluation of certain assets, and requiring two years of income statements rather than three.
3) The IASB and FASB are working on changes to financial statement presentation that would classify items similarly to the statement of cash flows and provide more detail on functional and natural line items.
Ac 107 Education Organization-snaptutorial.comrobertlesew
For more classes visit
www.snaptutorial.com
AC 107 Week 1 Unit 1 Assignment (Score 49.5/50)
AC 107 Week 1 Discussion
AC 107 Week 2 Unit 2 Assignment (Score 47/50)
AC 107 Week 2 Discussion
AC 107 Exceptional Education - snaptutorial.comDavisMurphyA86
For more classes visit
www.snaptutorial.com
AC 107 Week 1 Unit 1 Assignment (Score 49.5/50)
AC 107 Week 1 Discussion
AC 107 Week 2 Unit 2 Assignment (Score 47/50)
Ac 107 Extraordinary Success/newtonhelp.com amaranthbeg123
The document outlines the assignments, exams, quizzes, and discussions for an entire accounting course (AC 107). It includes weekly assignments on different accounting topics, midterm and final exams, and weekly discussions. Scores are provided for some of the assignments.
For more course tutorials visit
www.newtonhelp.com
AC 107 Week 1 Unit 1 Assignment (Score 49.5/50)
AC 107 Week 1 Discussion
AC 107 Week 2 Unit 2 Assignment (Score 47/50)
AC 107 Week 2 Discussion
AC 107 Week 3 Unit 3 Assignment (Score 40/50)
Ac 107 Enhance teaching / snaptutorial.comBaileya17
For more classes visit
www.snaptutorial.com
AC 107 Week 1 Unit 1 Assignment (Score 49.5/50)
AC 107 Week 1 Discussion
AC 107 Week 2 Unit 2 Assignment (Score 47/50)
AC 107 Week 2 Discussion
AC 107 Week 3 Unit 3 Assignment (Score 40/50)
AC 107 Enhance teaching - tutorialrank.comLeoTolstoy0
For more course tutorials visit
www.tutorialrank.com
AC 107 Week 1 Unit 1 Assignment (Score 49.5/50)
AC 107 Week 1 Discussion
AC 107 Week 2 Unit 2 Assignment (Score 47/50)
AC 107 Effective Communication/tutorialrank.comjonhson168
For more course tutorials visit
www.tutorialrank.com
AC 107 Week 1 Unit 1 Assignment (Score 49.5/50)
AC 107 Week 1 Discussion
AC 107 Week 2 Unit 2 Assignment (Score 47/50)
AC 107 Week 2 Discussion
This document provides an overview of chapter 6 on inventories from the textbook "Financial Accounting, IFRS Edition". It outlines 6 study objectives related to determining inventory quantities, accounting for inventories using different cost flow methods, the financial effects of cost flow assumptions, the lower-of-cost-or-net realizable value basis, effects of inventory errors, and analyzing inventories using turnover ratios. The document contains slides with explanations, examples, and review questions to explain key inventory accounting concepts.
This document discusses accounting for inventories. It covers classifying inventory into raw materials, work in process and finished goods for manufacturing companies. It also discusses valuing inventory under the periodic and perpetual inventory systems. The document explains the basic issues in inventory valuation including determining ownership, costs included, and cost flow assumptions like specific identification, FIFO and average cost. It provides examples of applying inventory cost flow methods.
This document discusses key concepts related to inventory accounting, including determining inventory quantities through physical counts and assessing ownership, accounting for inventory using different cost flow methods like FIFO and LIFO, and understanding the financial statement and tax effects of different cost flow assumptions. The objectives are to explain steps to determine inventory quantities, apply cost flow methods, and analyze the impacts of assumptions on financial reporting and taxes.
The document discusses accounting transactions for purchases and sales of stock. It explains that purchases increase the stock asset and may increase liabilities, while sales decrease stock and increase a receivable asset. Purchases on credit differ from those paid in cash in their impact on liabilities. Similarly, sales on credit differ from cash sales in their impact on receivables. The document also covers returns inwards, which increase stock when goods are returned by customers, and returns outwards, which decrease stock and liabilities when goods are returned to suppliers.
1) The document discusses accounting for merchandising businesses. It explains that for merchandising businesses, revenue comes from sales and expenses are divided into cost of goods sold and operating expenses.
2) It describes the periodic and perpetual inventory systems and how they are used to track inventory levels and calculate cost of goods sold. The periodic system involves periodic physical counts while the perpetual system continuously tracks inventory.
3) The document provides examples of journal entries for purchases, sales, returns, and allowances for merchandising businesses. It explains how to record transactions like purchases, sales, returns, discounts and freight costs under both accounting systems.
1) The document discusses accounting for merchandising activities, including the operating cycle of merchandising companies, income statements, and two approaches to inventory accounting - perpetual and periodic systems.
2) Key aspects covered include the general ledger and use of subsidiary ledgers to provide more detailed accounting information for inventory, receivables, payables and other accounts.
3) The perpetual inventory system allows for continuous updating of inventory balances as transactions occur, using journal entries to record purchases, sales, payments and physical inventory counts.
This document outlines key concepts related to inventory accounting. It begins by describing the steps involved in determining inventory quantities, which include taking a physical inventory count, determining ownership of goods in transit, and accounting for consigned goods. It then explains different inventory cost flow methods including specific identification, FIFO, LIFO, and average cost. It discusses the financial statement and tax effects of each cost flow method. The document also covers the lower-of-cost-or-market principle and calculating and interpreting the inventory turnover ratio. It concludes by demonstrating how to apply cost flow methods to perpetual inventory records.
The document provides an overview of accounting for merchandising operations. It discusses:
1) The differences between service companies and merchandising companies. Merchandising companies purchase inventory to sell directly or to retailers/wholesalers.
2) The operating cycle and flow of costs for merchandising companies, which involves perpetual and periodic inventory systems for recording purchases and sales.
3) Key steps in the accounting cycle for merchandising companies, including adjusting and closing entries to determine net income.
The document discusses accounting concepts for merchandising businesses, including transactions like purchases, sales, discounts, and returns. It covers the periodic and perpetual inventory systems and how cost of goods sold is calculated under each. The periodic system calculates cost of goods sold at the end of each period while the perpetual system calculates it at the time of each sale. The document also discusses the different forms financial statements can take for merchandising businesses, like single-step and multiple-step income statements.
This document discusses inventory valuation methods and cost flow assumptions. It provides an example of a company, Young & Crazy Company, that makes three inventory purchases throughout a month. Using this example, it illustrates the calculation of ending inventory and cost of goods sold under the FIFO, LIFO, average cost, and specific identification cost flow assumptions. For each method, it shows the impact on the company's income statement. Comparing the results demonstrates how the different cost flow assumptions can lead to different reports of financial performance.
1) The document provides an overview of accounting for inventory under a periodic inventory system according to IFRS and compares it to U.S. GAAP.
2) Key differences between IFRS and GAAP include IFRS allowing classification of expenses by nature or function, permitting revaluation of certain assets, and requiring two years of income statements rather than three.
3) The IASB and FASB are working on changes to financial statement presentation that would classify items similarly to the statement of cash flows and provide more detail on functional and natural line items.
Ac 107 Education Organization-snaptutorial.comrobertlesew
For more classes visit
www.snaptutorial.com
AC 107 Week 1 Unit 1 Assignment (Score 49.5/50)
AC 107 Week 1 Discussion
AC 107 Week 2 Unit 2 Assignment (Score 47/50)
AC 107 Week 2 Discussion
AC 107 Exceptional Education - snaptutorial.comDavisMurphyA86
For more classes visit
www.snaptutorial.com
AC 107 Week 1 Unit 1 Assignment (Score 49.5/50)
AC 107 Week 1 Discussion
AC 107 Week 2 Unit 2 Assignment (Score 47/50)
Ac 107 Extraordinary Success/newtonhelp.com amaranthbeg123
The document outlines the assignments, exams, quizzes, and discussions for an entire accounting course (AC 107). It includes weekly assignments on different accounting topics, midterm and final exams, and weekly discussions. Scores are provided for some of the assignments.
For more course tutorials visit
www.newtonhelp.com
AC 107 Week 1 Unit 1 Assignment (Score 49.5/50)
AC 107 Week 1 Discussion
AC 107 Week 2 Unit 2 Assignment (Score 47/50)
AC 107 Week 2 Discussion
AC 107 Week 3 Unit 3 Assignment (Score 40/50)
Ac 107 Enhance teaching / snaptutorial.comBaileya17
For more classes visit
www.snaptutorial.com
AC 107 Week 1 Unit 1 Assignment (Score 49.5/50)
AC 107 Week 1 Discussion
AC 107 Week 2 Unit 2 Assignment (Score 47/50)
AC 107 Week 2 Discussion
AC 107 Week 3 Unit 3 Assignment (Score 40/50)
AC 107 Enhance teaching - tutorialrank.comLeoTolstoy0
For more course tutorials visit
www.tutorialrank.com
AC 107 Week 1 Unit 1 Assignment (Score 49.5/50)
AC 107 Week 1 Discussion
AC 107 Week 2 Unit 2 Assignment (Score 47/50)
AC 107 Effective Communication/tutorialrank.comjonhson168
For more course tutorials visit
www.tutorialrank.com
AC 107 Week 1 Unit 1 Assignment (Score 49.5/50)
AC 107 Week 1 Discussion
AC 107 Week 2 Unit 2 Assignment (Score 47/50)
AC 107 Week 2 Discussion
This document provides an overview of chapter 6 on inventories from the textbook "Financial Accounting, IFRS Edition". It outlines 6 study objectives related to determining inventory quantities, accounting for inventories using different cost flow methods, the financial effects of cost flow assumptions, the lower-of-cost-or-net realizable value basis, effects of inventory errors, and analyzing inventories using turnover ratios. The document contains slides with explanations, examples, and review questions to explain key inventory accounting concepts.
This document discusses accounting for inventories. It covers classifying inventory into raw materials, work in process and finished goods for manufacturing companies. It also discusses valuing inventory under the periodic and perpetual inventory systems. The document explains the basic issues in inventory valuation including determining ownership, costs included, and cost flow assumptions like specific identification, FIFO and average cost. It provides examples of applying inventory cost flow methods.
This document discusses key concepts related to inventory accounting, including determining inventory quantities through physical counts and assessing ownership, accounting for inventory using different cost flow methods like FIFO and LIFO, and understanding the financial statement and tax effects of different cost flow assumptions. The objectives are to explain steps to determine inventory quantities, apply cost flow methods, and analyze the impacts of assumptions on financial reporting and taxes.
The document discusses accounting transactions for purchases and sales of stock. It explains that purchases increase the stock asset and may increase liabilities, while sales decrease stock and increase a receivable asset. Purchases on credit differ from those paid in cash in their impact on liabilities. Similarly, sales on credit differ from cash sales in their impact on receivables. The document also covers returns inwards, which increase stock when goods are returned by customers, and returns outwards, which decrease stock and liabilities when goods are returned to suppliers.
1) The document discusses accounting for merchandising businesses. It explains that for merchandising businesses, revenue comes from sales and expenses are divided into cost of goods sold and operating expenses.
2) It describes the periodic and perpetual inventory systems and how they are used to track inventory levels and calculate cost of goods sold. The periodic system involves periodic physical counts while the perpetual system continuously tracks inventory.
3) The document provides examples of journal entries for purchases, sales, returns, and allowances for merchandising businesses. It explains how to record transactions like purchases, sales, returns, discounts and freight costs under both accounting systems.
1) The document discusses accounting for merchandising activities, including the operating cycle of merchandising companies, income statements, and two approaches to inventory accounting - perpetual and periodic systems.
2) Key aspects covered include the general ledger and use of subsidiary ledgers to provide more detailed accounting information for inventory, receivables, payables and other accounts.
3) The perpetual inventory system allows for continuous updating of inventory balances as transactions occur, using journal entries to record purchases, sales, payments and physical inventory counts.
This document outlines key concepts related to inventory accounting. It begins by describing the steps involved in determining inventory quantities, which include taking a physical inventory count, determining ownership of goods in transit, and accounting for consigned goods. It then explains different inventory cost flow methods including specific identification, FIFO, LIFO, and average cost. It discusses the financial statement and tax effects of each cost flow method. The document also covers the lower-of-cost-or-market principle and calculating and interpreting the inventory turnover ratio. It concludes by demonstrating how to apply cost flow methods to perpetual inventory records.
The document provides an overview of accounting for merchandising operations. It discusses:
1) The differences between service companies and merchandising companies. Merchandising companies purchase inventory to sell directly or to retailers/wholesalers.
2) The operating cycle and flow of costs for merchandising companies, which involves perpetual and periodic inventory systems for recording purchases and sales.
3) Key steps in the accounting cycle for merchandising companies, including adjusting and closing entries to determine net income.
The document discusses accounting concepts for merchandising businesses, including transactions like purchases, sales, discounts, and returns. It covers the periodic and perpetual inventory systems and how cost of goods sold is calculated under each. The periodic system calculates cost of goods sold at the end of each period while the perpetual system calculates it at the time of each sale. The document also discusses the different forms financial statements can take for merchandising businesses, like single-step and multiple-step income statements.
This document discusses inventory valuation methods and cost flow assumptions. It provides an example of a company, Young & Crazy Company, that makes three inventory purchases throughout a month. Using this example, it illustrates the calculation of ending inventory and cost of goods sold under the FIFO, LIFO, average cost, and specific identification cost flow assumptions. For each method, it shows the impact on the company's income statement. Comparing the results demonstrates how the different cost flow assumptions can lead to different reports of financial performance.
The document discusses factors that influence the development of international accounting standards and practices. It identifies 8 key factors: sources of finance, legal systems, political/economic ties between countries, inflation levels, taxation, economic development, education levels, and culture. Accounting systems vary between countries based on differences in these underlying developmental factors. Understanding how the factors shape accounting in different environments helps explain diversity and similarities between nations' accounting standards and practices.
This document provides an overview of logistics management. It defines logistics as the management of the flow of goods, resources, and information from the point of origin to the destination. The goal of logistics management is to ensure the efficient delivery of the right product, at the right cost, quantity, quality, place and time to customers. It discusses the key components of logistics including transportation, inventory planning, warehousing, and packaging. It also outlines the objectives and major functions of logistics management such as transportation management, warehouse management, and inventory management.
This document discusses two techniques for business decision making: cost-benefit analysis and SWOT analysis.
Cost-benefit analysis involves comparing the estimated costs and benefits of different project options to determine which makes the most business sense. The goal is to maximize total net profit.
SWOT analysis examines the strengths, weaknesses, opportunities, and threats of a business or project. It helps identify internal strengths and weaknesses as well as external opportunities and threats. Managers use SWOT analysis to guide strategic planning and evaluate major changes.
The document provides guidance on properly conducting a SWOT analysis, including examples of questions to consider for each component. It also outlines how to analyze and apply the results of a SWOT analysis to identify
This chapter discusses the consolidation of financial information for business combinations. It explains that consolidated financial statements combine the financial data of a parent company and its subsidiaries. The chapter outlines the acquisition method for accounting for business combinations, where one company obtains control of another. Under this method, the consideration transferred is allocated to identifiable assets acquired and liabilities assumed based on their fair values. Goodwill arises when the consideration exceeds the fair values. The chapter also discusses how pre-existing goodwill and in-process R&D are treated under the acquisition method.
This document provides an overview of different types of charts and graphs that can be used to visualize data, including histograms, frequency polygons, ogives, pie charts, stem and leaf plots, Pareto charts, and scatter plots. It discusses the key concepts of grouped versus ungrouped data, constructing frequency distributions, calculating relative and cumulative frequencies, and provides examples of how to build each type of chart using sample data sets.
This document outlines professional standards that CPAs must follow when conducting audits and attestation engagements. It discusses the types of practice standards that govern work for different entities. Generally Accepted Auditing Standards (GAAS) are described in detail, including the general standards, standards of fieldwork, evidence considerations, and reporting standards. The document also discusses attestation standards, quality control standards for CPA firms, and the role of the Public Company Accounting Oversight Board in standard-setting and oversight of audits of public companies.
Forensic accounting refers to accounting work performed for legal purposes, such as investigating potential fraud. Forensic accountants use auditing techniques as well as investigative skills to conduct detailed analyses of financial records to detect issues like embezzlement, insurance fraud, or tax evasion. Their work is often used in litigation to quantify economic damages or losses. Key areas forensic accountants work in include fraud investigation, bankruptcy, insurance claims, and criminal or civil court cases.
This document provides an overview of managerial accounting concepts and objectives. It begins by identifying four learning objectives: 1) identify features of managerial accounting and management functions, 2) describe classes of manufacturing costs and differences between product and period costs, 3) demonstrate how to compute cost of goods manufactured and prepare financial statements for a manufacturer, and 4) discuss trends in managerial accounting. It then covers topics related to each objective, including managerial vs financial accounting, management functions, cost classifications, cost of goods manufactured calculations, and contemporary issues like just-in-time inventory and activity-based costing.
This document provides an outline for a course on principles of auditing and assurance. It introduces key topics that will be covered, including the definition of an audit, elements of an assurance engagement, appropriate evidence and reporting. An audit is defined as an independent examination and expression of an opinion on an entity's financial statements. It discusses the roles of the practitioner, responsible party and intended users. Criteria are also outlined as the benchmarks used to evaluate the subject matter of an assurance engagement.
Job-order costing is a system used when a company produces unique products in small batches. It requires tracing costs to individual jobs and maintaining separate cost records for each job. Direct materials, direct labor, and manufacturing overhead costs are charged to work in process and then transferred to finished goods as jobs are completed. Manufacturing overhead is applied to jobs using a predetermined overhead rate. Nonmanufacturing costs are expensed in the period incurred rather than assigned to jobs.
chapter- 1 inroduction to advanced financial accounting.pptxMohamedAbdi347025
This document provides an overview of accounting concepts including the framework, objectives, and standards of accounting. It defines accounting as recording, classifying, and summarizing financial transactions and events. The key objectives of accounting are to systematically record transactions, ascertain financial results and position, and provide information to decision makers. International standards like IFRS and domestic standards like US GAAP aim to standardize accounting policies for consistency and comparability.
The document provides an overview of consolidation of financial information and business combinations. It discusses reasons why firms combine, including cost savings, market entry, economies of scale, and diversification. It describes the consolidation process, which involves preparing a single set of consolidated financial statements by bringing together subsidiaries' and the parent's financial data, eliminating reciprocal accounts and intra-entity transactions. Business combinations can be achieved through transactions that result in one entity obtaining control over one or more businesses and creating a single economic entity that requires consolidated financial statements.
During the budget session of 2024-25, the finance minister, Nirmala Sitharaman, introduced the “solar Rooftop scheme,” also known as “PM Surya Ghar Muft Bijli Yojana.” It is a subsidy offered to those who wish to put up solar panels in their homes using domestic power systems. Additionally, adopting photovoltaic technology at home allows you to lower your monthly electricity expenses. Today in this blog we will talk all about what is the PM Surya Ghar Muft Bijli Yojana. How does it work? Who is eligible for this yojana and all the other things related to this scheme?
Cover Story - China's Investment Leader - Dr. Alyce SUmsthrill
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
Unlocking WhatsApp Marketing with HubSpot: Integrating Messaging into Your Ma...Niswey
50 million companies worldwide leverage WhatsApp as a key marketing channel. You may have considered adding it to your marketing mix, or probably already driving impressive conversions with WhatsApp.
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We take a look at everything that you need to know in order to deploy effective WhatsApp marketing strategies, and integrate it with your buyer journey in HubSpot. From technical requirements to innovative campaign strategies, to advanced campaign reporting - we discuss all that and more, to leverage WhatsApp for maximum impact. Check out more details about the event here https://events.hubspot.com/events/details/hubspot-new-delhi-presents-unlocking-whatsapp-marketing-with-hubspot-integrating-messaging-into-your-marketing-strategy/
Best Competitive Marble Pricing in Dubai - ☎ 9928909666Stone Art Hub
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Presentation by Herman Kienhuis (Curiosity VC) on Investing in AI for ABS Alu...Herman Kienhuis
Presentation by Herman Kienhuis (Curiosity VC) on developments in AI, the venture capital investment landscape and Curiosity VC's approach to investing, at the alumni event of Amsterdam Business School (University of Amsterdam) on June 13, 2024 in Amsterdam.
Efficient PHP Development Solutions for Dynamic Web ApplicationsHarwinder Singh
Unlock the full potential of your web projects with our expert PHP development solutions. From robust backend systems to dynamic front-end interfaces, we deliver scalable, secure, and high-performance applications tailored to your needs. Trust our skilled team to transform your ideas into reality with custom PHP programming, ensuring seamless functionality and a superior user experience.
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Business analysis - Prescriptive analytics Introduction to Prescriptive analytics
Prescriptive Modeling
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The APCO Geopolitical Radar - Q3 2024 The Global Operating Environment for Bu...APCO
The Radar reflects input from APCO’s teams located around the world. It distils a host of interconnected events and trends into insights to inform operational and strategic decisions. Issues covered in this edition include:
The Most Inspiring Entrepreneurs to Follow in 2024.pdfthesiliconleaders
In a world where the potential of youth innovation remains vastly untouched, there emerges a guiding light in the form of Norm Goldstein, the Founder and CEO of EduNetwork Partners. His dedication to this cause has earned him recognition as a Congressional Leadership Award recipient.
[To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
This presentation is a curated compilation of PowerPoint diagrams and templates designed to illustrate 20 different digital transformation frameworks and models. These frameworks are based on recent industry trends and best practices, ensuring that the content remains relevant and up-to-date.
Key highlights include Microsoft's Digital Transformation Framework, which focuses on driving innovation and efficiency, and McKinsey's Ten Guiding Principles, which provide strategic insights for successful digital transformation. Additionally, Forrester's framework emphasizes enhancing customer experiences and modernizing IT infrastructure, while IDC's MaturityScape helps assess and develop organizational digital maturity. MIT's framework explores cutting-edge strategies for achieving digital success.
These materials are perfect for enhancing your business or classroom presentations, offering visual aids to supplement your insights. Please note that while comprehensive, these slides are intended as supplementary resources and may not be complete for standalone instructional purposes.
Frameworks/Models included:
Microsoft’s Digital Transformation Framework
McKinsey’s Ten Guiding Principles of Digital Transformation
Forrester’s Digital Transformation Framework
IDC’s Digital Transformation MaturityScape
MIT’s Digital Transformation Framework
Gartner’s Digital Transformation Framework
Accenture’s Digital Strategy & Enterprise Frameworks
Deloitte’s Digital Industrial Transformation Framework
Capgemini’s Digital Transformation Framework
PwC’s Digital Transformation Framework
Cisco’s Digital Transformation Framework
Cognizant’s Digital Transformation Framework
DXC Technology’s Digital Transformation Framework
The BCG Strategy Palette
McKinsey’s Digital Transformation Framework
Digital Transformation Compass
Four Levels of Digital Maturity
Design Thinking Framework
Business Model Canvas
Customer Journey Map
3. Chapter
5-3
1. Identify the differences between service and
merchandising companies.
2. Explain the recording of purchases under a perpetual
inventory system.
3. Explain the recording of sales revenues under a perpetual
inventory system.
4. Explain the steps in the accounting cycle for a
merchandising company.
5. Distinguish between a multiple-step and a single-step
income statement.
6. Explain the computation and importance of gross profit.
Study Objectives
4. Chapter
5-4
Forms of
Financial
Statements
Accounting for Merchandising Operations
• Freight costs
• Purchase
returns and
allowances
• Purchase
discounts
• Summary of
purchasing
transactions
Merchandising
Operations
Recording
Purchases of
Merchandise
Recording
Sales of
Merchandise
Completing
the
Accounting
Cycle
• Operating
cycles
• Flow of
costs—perpet
ual and
periodic
inventory
systems
• Sales returns
and
allowances
• Sales
discounts
• Adjusting
entries
• Closing
entries
• Summary of
merchandising
entries
• Multiple-step
income
statement
• Single-step
income
statement
• Classified
balance sheet
5. Chapter
5-5
Merchandising Operations
SO 1 Identify the differences between service and merchandising companies.
Merchandising Companies
Buy and Sell Goods
Wholesaler Retailer Consumer
The primary source of revenues is referred to as
sales revenue or sales.
6. Chapter
5-6
Merchandising Operations
Income Measurement
Illustration 5-1
Cost of goods sold is the
total cost of merchandise sold
during the period.
Not used in a
Service business.
Net
Income
(Loss)
Less
Less
Equals
Equals
Sales
Revenue
Cost of
Goods Sold
Gross
Profit
Operating
Expenses
SO 1 Identify the differences between service and merchandising companies.
7. Chapter
5-7
The operating
cycle of a
merchandising
company
ordinarily is
longer than
that of a
service
company.
Operating Cycles
Illustration 5-2
SO 1 Identify the differences between service and merchandising companies.
8. Chapter
5-8
Features:
Perpetual System
1. Purchases increase Merchandise Inventory.
2. Freight costs, Purchase Returns and Allowances and
Purchase Discounts are included in Merchandise Inventory.
3. Cost of Goods Sold is increased and Merchandise Inventory
is decreased for each sale.
4. Physical count done to verify Merchandise Inventory
balance.
The perpetual inventory system provides a continuous record
of Merchandise Inventory and Cost of Goods Sold.
Flow of Costs
SO 1 Identify the differences between service and merchandising companies.
9. Chapter
5-9
Features:
Periodic System
1. Purchases of merchandise increase Purchases.
2. Ending Inventory determined by physical count.
3. Calculation of Cost of Goods Sold:
Flow of Costs
Beginning inventory $ 100,000
Add: Purchases, net 800,000
Goods available for sale 900,000
Less: Ending inventory 125,000
Cost of goods sold $ 775,000
SO 1 Identify the differences between service and merchandising companies.
10. Chapter
5-10
• Made using cash or
credit (on account).
• Normally recorded
when
goods are received.
• Purchase invoice should
support each credit
purchase.
Recording Purchases of Merchandise
SO 2 Explain the recording of purchases under a perpetual inventory system.
Illustration 5-5
11. Chapter
5-11
Under the perpetual inventory system, companies record in
the Merchandise Inventory account the purchase of goods
they intend to sell.
Illustration: From INVOICE NO. 731 (Illustration 5-5) record
the journal entry Sauk Stereo would make to record its
purchase from PW Audio Supply.
Merchandise inventory 3,800
May 4
Accounts payable 3,800
Recording Purchases of Merchandise
SO 2 Explain the recording of purchases under a perpetual inventory system.
12. Chapter
5-12
Illustration 5-6
Seller places goods Free
On Board the carrier, and
buyer pays freight costs.
Seller places goods Free
On Board to the buyer’s
place of business, and
seller pays freight costs.
Recording Purchases of Merchandise
Freight Costs – Terms of Sale
Freight costs incurred by the seller are an operating expense.
13. Chapter
5-13
Illustration: Assume upon delivery of the goods on May 6,
Sauk Stereo pays Acme Freight Company $150 for freight
charges, the entry on Sauk Stereo’s books is:
Merchandise inventory 150
May 6
Cash 150
Recording Purchases of Merchandise
SO 2 Explain the recording of purchases under a perpetual inventory system.
Assume the freight terms on the invoice in Illustration 5-5
had required PW Audio Supply to pay the freight charges,
the entry by PW Audio Supply would have been:
Freight-out (or Delivery Expense) 150
May 6
Cash 150
14. Chapter
5-14
Purchaser may be dissatisfied because goods are
damaged or defective, of inferior quality, or do not
meet specifications.
Purchase Returns and Allowances
Recording Purchases of Merchandise
Return goods for credit
if the sale was made on
credit, or for a cash
refund if the purchase
was for cash.
May choose to keep the
merchandise if the seller
will grant an allowance
(deduction) from the
purchase price.
Purchase Return Purchase Allowance
SO 2 Explain the recording of purchases under a perpetual inventory system.
15. Chapter
5-15
In a perpetual inventory system, a return of
defective merchandise by a purchaser is
recorded by crediting:
a. Purchases
b. Purchase Returns
c. Purchase Allowance
d. Merchandise Inventory
Question
Recording Purchases of Merchandise
SO 2 Explain the recording of purchases under a perpetual inventory system.
16. Chapter
5-16
Recording Purchases of Merchandise
SO 2 Explain the recording of purchases under a perpetual inventory system.
Illustration: Assume that on May 8 Sauk Stereo returned to
PW Audio Supply goods costing $300.
Accounts payable300
May 8
Merchandise inventory 300
17. Chapter
5-17
Credit terms may permit buyer to claim a cash
discount for prompt payment.
Advantages:
• Purchaser saves money.
• Seller shortens the operating cycle.
Purchase Discounts
Recording Purchases of Merchandise
Example: Credit terms of 2/10, n/30, is read “two-ten, net
thirty.” 2% cash discount if payment is made within 10 days.
SO 2 Explain the recording of purchases under a perpetual inventory system.
18. Chapter
5-18
Purchase Discounts Terms
Recording Purchases of Merchandise
2% discount if
paid within 10
days,
otherwise net
amount due
within 30 days.
1% discount if
paid within
first 10 days
of next month.
2/10, n/30 1/10 EOM
Net amount
due within the
first 10 days
of the next
month.
n/10 EOM
SO 2 Explain the recording of purchases under a perpetual inventory system.
19. Chapter
5-19
Accounts payable3,500
May 14
Cash 3,430
Recording Purchases of Merchandise
Merchandise Inventory 70
(Discount = $3,500 x 2% = $70)
SO 2 Explain the recording of purchases under a perpetual inventory system.
Illustration: Assume Sauk Stereo pays the balance due of
$3,500 (gross invoice price of $3,800 less purchase returns
and allowances of $300) on May 14, the last day of the
discount period. Prepare the journal entry Sauk makes to
record its May 14 payment.
20. Chapter
5-20
Accounts payable3,500
June 3
Recording Purchases of Merchandise
Cash 3,500
SO 2 Explain the recording of purchases under a perpetual inventory system.
Illustration: If Sauk Stereo failed to take the discount, and
instead made full payment of $3,500 on June 3, the journal
entry would be:
21. Chapter
5-21
Should discounts be taken when offered?
Purchase Discounts
Recording Purchases of Merchandise
Example: 2% for 20 days = Annual rate of 36.5%
(365/20 = 18.25 twenty-day periods x 2% = 36.5%)
Passing up the discount offered equates to paying an
interest rate of 2% on the use of $3,500 for 20 days.
SO 2 Explain the recording of purchases under a perpetual inventory system.
22. Chapter
5-22
$3,500 8th
- Return
$300
Balance
4th
- Purchase
$3,580
70 14th
- Discount
Recording Purchases of Merchandise
Summary of Purchasing Transactions
150
6th
– Freight-in
Illustratio
n
SO 2 Explain the recording of purchases under a perpetual inventory system.
23. Chapter
5-23
• Made for cash or credit (on account).
• Normally recorded when
earned, usually when
goods transfer from
seller to buyer.
• Sales invoice should
support each credit
sale.
Recording Sales of Merchandise
SO 3 Explain the recording of sales revenues
under a perpetual inventory system.
Illustration 5-5
24. Chapter
5-24
Two Journal Entries to Record a Sale
Cash or Accounts receivable XXX
Sales XXX
Recording Sales of Merchandise
SO 3 Explain the recording of sales revenues
under a perpetual inventory system.
#1
Cost of goods sold XXX
Merchandise inventory XXX
#2
Selling
Price
Cost
25. Chapter
5-25
Recording Sales of Merchandise
SO 3 Explain the recording of sales revenues
under a perpetual inventory system.
Accounts receivable 3,800
May 4
Sales 3,800
Illustration: Assume PW Audio Supply records its May 4
sale of $3,800 to Sauk Stereo (Illustration 5-5) as follows.
Assume the merchandise cost PW Audio Supply $2,400.
Cost of goods sold 2,400
4
Merchandise inventory 2,400
26. Chapter
5-26
• “Flipside” of purchase returns and allowances.
• Contra-revenue account (debit).
• Sales not reduced (debited) because:
would obscure importance of sales returns and
allowances as a percentage of sales.
could distort comparisons between total sales
in different accounting periods.
Sales Returns and Allowances
Recording Sales of Merchandise
SO 3 Explain the recording of sales revenues
under a perpetual inventory system.
27. Chapter
5-27
Illustration: Prepare the entry PW Audio Supply would make
to record the credit for returned goods that had a $300
selling price (assume a $140 cost). Assume the goods were
not defective.
Recording Sales of Merchandise
SO 3 Explain the recording of sales revenues
under a perpetual inventory system.
Sales returns and allowances 300
May 8
Accounts receivable 300
Merchandise inventory 140
8
Cost of goods sold 140
28. Chapter
5-28
Illustration: Assume the returned goods were defective and
had a scrap value of $50, PW Audio would make the following
entries:
Recording Sales of Merchandise
SO 3 Explain the recording of sales revenues
under a perpetual inventory system.
Sales returns and allowances 300
May 8
Accounts receivable 300
Merchandise inventory 50
8
Cost of goods sold 50
29. Chapter
5-29
The cost of goods sold is determined and
recorded each time a sale occurs in:
a. periodic inventory system only.
b. a perpetual inventory system only.
c. both a periodic and perpetual inventory
system.
d. neither a periodic nor perpetual inventory
system.
Review Question
Recording Sales of Merchandise
SO 3 Explain the recording of sales revenues
under a perpetual inventory system.
31. Chapter
5-31
• Offered to customers to promote prompt
payment.
• “Flipside” of purchase discount.
• Contra-revenue account (debit).
Sales Discount
Recording Sales of Merchandise
SO 3 Explain the recording of sales revenues
under a perpetual inventory system.
32. Chapter
5-32
Recording Sales of Merchandise
SO 3 Explain the recording of sales revenues
under a perpetual inventory system.
Cash 3,430
May 14
Accounts receivable 3,500
Sales discounts 70
* [($3,800 – $300) X
2%]
*
Illustration: Assume Sauk Stereo pays the balance due of
$3,500 (gross invoice price of $3,800 less purchase returns
and allowances of $300) on May 14, the last day of the
discount period. Prepare the journal entry PW Audio Supply
makes to record the receipt on May 14.
33. Chapter
5-33
Q5-9 Joan Roland believes revenues from credit
sales may be earned before they are
collected in cash. Do you agree? Explain.
Discussion Question
See notes page for discussion
Recording Sales of Merchandise
SO 3 Explain the recording of sales revenues
under a perpetual inventory system.
34. Chapter
5-34
• Generally the same as a service company.
• One additional adjustment to make the records
agree with the actual inventory on hand.
• Involves adjusting Merchandise Inventory and
Cost of Goods Sold.
Adjusting Entries
Completing the Accounting Cycle
SO 4 Explain the steps in the accounting cycle for a merchandising company.
35. Chapter
5-35
Completing the Accounting Cycle
SO 4 Explain the steps in the accounting cycle for a merchandising company.
Illustration: Suppose that PW Audio Supply has an
unadjusted balance of $40,500 in Merchandise Inventory.
Through a physical count, PW Audio determines that its
actual merchandise inventory at year-end is $40,000. The
company would make an adjusting entry as follows.
Cost of goods sold 500
Merchandise inventory 500
37. Chapter
5-37
• Shows several steps in determining net income.
• Two steps relate to principal operating
activities.
• Distinguishes between operating and non-
operating activities.
Multiple-Step Income Statement
Forms of Financial Statements
SO 5 Distinguish between a multiple-step and a single-step income statement.
38. Chapter
5-38 SO 6 Explain the computation and importance of gross profit.
Illustration 5-13
Key Items:
• Net sales
• Gross profit
• Gross profit
rate
Illustration 5-10
Calculation of Gross Profit
40. Chapter
5-40
Forms of
Financial
Statements
Key Items:
• Net sales
• Gross profit
• Operating
expenses
• Nonoperating
activities
• Net income
SO 5 Distinguish between a multiple-step and a single-step income statement.
Illustration 5-13
41. Chapter
5-41
The multiple-step income statement for a
merchandiser shows each of the following
features except:
a. gross profit.
b. cost of goods sold.
c. a sales revenue section.
d. investing activities section.
Review Question
Forms of Financial Statements
SO 5 Distinguish between a multiple-step and a single-step income statement.
42. Chapter
5-42
• Subtract total expenses from total revenues
• Two reasons for using the single-step format:
1) Company does not realize any type of profit
until total revenues exceed total expenses.
2) Format is simpler and easier to read.
Single-Step Income Statement
Forms of Financial Statements
SO 5 Distinguish between a multiple-step and a single-step income statement.
44. Chapter
5-44
Forms of Financial Statements
Illustration 5-15
Classified Balance Sheet
SO 5 Distinguish between a multiple-step and a single-step income statement.
45. Chapter
5-45
Periodic System
• Separate accounts used to record purchases,
freight costs, returns, and discounts.
• Company does not maintain a running account
of changes in inventory.
• Ending inventory determined by physical count.
SO 7 Explain the recording of purchases and sales of
inventory under a periodic inventory
Periodic Inventory System
46. Chapter
5-46
Calculation of Cost of Goods Sold
$316,000
Illustration 5A-1
SO 7 Explain the recording of purchases and sales of
inventory under a periodic inventory
Periodic Inventory System
47. Chapter
5-47
Recording Purchases under Periodic System
SO 7 Explain the recording of purchases and sales of
inventory under a periodic inventory
Illustration: On the basis of the sales invoice (Illustration 5-5)
and receipt of the merchandise ordered from PW Audio
Supply, Sauk Stereo records the $3,800 purchase as follows.
Purchases 3,800
May 4
Accounts payable 3,800
48. Chapter
5-48
Recording Purchases under Periodic System
SO 7 Explain the recording of purchases and sales of
inventory under a periodic inventory
Illustration: If Sauk pays Haul-It Freight Company $150
for freight charges on its purchase from PW Audio Supply on
May 6, the entry on Sauk’s books is:
Freight-in (Transportation-in) 150
May 6
Cash 150
Freight Costs
49. Chapter
5-49
Recording Purchases under Periodic System
SO 7 Explain the recording of purchases and sales of
inventory under a periodic inventory
Illustration: Sauk Stereo returns $300 of goods to PW Audio
Supply and prepares the following entry to recognize the
return.
Accounts payable300
May 8
Purchase returns and allowances 300
Purchase Returns and Allowances
50. Chapter
5-50
Recording Purchases under Periodic System
SO 7 Explain the recording of purchases and sales of
inventory under a periodic inventory
Illustration: On May 14 Sauk Stereo pays the balance due on
account to PW Audio Supply, taking the 2% cash discount
allowed by PW Audio for payment within 10 days. Sauk
Stereo records the payment and discount as follows.
Accounts payable3,500
May 14
Purchase discounts 70
Purchase Discounts
Cash 3,430
51. Chapter
5-51
No entry is recorded for cost of goods sold at the time
of the sale under a periodic system.
SO 7 Explain the recording of purchases and sales of
inventory under a periodic inventory
Recording Sales under Periodic System
Illustration: PW Audio Supply, records the sale of $3,800 of
merchandise to Sauk Stereo on May 4 (sales invoice No. 731,
Illustration 5-5) as follows.
Accounts receivable 3,800
May 4
Sales 3,800
52. Chapter
5-52
SO 7 Explain the recording of purchases and sales of
inventory under a periodic inventory
Illustration: To record the returned goods received from
Sauk Stereo on May 8, PW Audio Supply records the $300
sales return as follows.
Sales returns and allowances 300
May 4
Accounts receivable 300
Sales Returns and Allowances
Recording Sales under Periodic System
53. Chapter
5-53
SO 7 Explain the recording of purchases and sales of
inventory under a periodic inventory
Illustration: On May 14, PW Audio Supply receives payment
of $3,430 on account from Sauk Stereo. PW Audio honors the
2% cash discount and records the payment of Sauk’s account
receivable in full as follows.
Sales Discounts
Recording Sales under Periodic System
Cash 3,430
May 14
Accounts receivable 3,500
Sales discounts 70
54. Chapter
5-54
SO 7 Explain the recording of purchases and sales of
inventory under a periodic inventory
Comparison of Entries—Perpetual Vs. Periodic
Illustration 5A-2
55. Chapter
5-55
SO 7 Explain the recording of purchases and sales of
inventory under a periodic inventory
Comparison of Entries—Perpetual Vs. Periodic
Illustration 5A-2